Hedge Funds Outperform S&P, Anticipate Fed Rate Hike
Hedge funds showed a 2.52% year to date return in the week ending March 20, 2015 according to Preqin. This beats the S&P’s 2.39% year to date return. This announcement comes amidst hedge funds’ increasing divestment from US equities in anticipation of a federal funds rate hike. According to a BoA Fund Manager survey, 23% of investors believe U.S. equities are overvalued and 19% of global investors are underweight in U.S. equities – the largest percentage since 2008.
Vanguard Moves into Liquid Alts Space
Vanguard announced its intent to launch Vanguard Alternative Strategies Fund, a multi-alternative mutual fund, at the end of February. The fund will have a 10% allocation as an underlying fund of the Vanguard Managed Payout Fund (VPGDX). Vanguard hopes that the new actively managed fund will further diversify its Managed Payout Fund and provide a further hedge against inflation and market downturns. Vanguard’s move into liquid alts reflects a growing movement amongst funds to increase exposure to this sector.
Blackstone Purchase Willis Tower
Blackstone, a leading private equity firm, recently purchased the Willis Tower for $1.3 Billion. This is the first time a building in Chicago, and one of a few in the United States, has sold for over a billion dollars. Although, historically, the market in Chicago has been flat – the owners of Willis Tower were unsuccessful in selling the building in 2004 – Blackstone’s purchase could signify growth in the area. Blackstone has announced that $150M of investments will go towards renovating the SkyDeck and enhancing the tourist experience.
Sources: opalesque.com, dailyalts.com, nytimes.com